The real estate market is really heating up as we start to feel the rush of the springtime market! In this video I breakdown the local real estate market here in Riverside County and give you some insight as to what we might expect in the coming months. With some great tips for buyers and sellers trying to navigate this confusing market, everyone should watch this video!
Any questions? Reach out to me directly by email at Kyle@SoldByKyleWinn.com or by call or text at 951-852-9980.
Here we are in the first week of May 2023, and that means I have your real estate market update for April 2023 here in Riverside County! The real estate market has been performing a lot differently than you might expect, or compared to what you might be hearing in the news, so let’s get right to it!
Hey everybody, it's your friend, Kyle Winn, and if you’ve never seen my videos I am your real estate expert here in Southern California, specifically Riverside County. Real estate is always a popular topic in the news, and you’ll often find conflicting reports because the news usually zooms way out and highlights trends based on national averages. But it is so important to understand that real estate trends are actually very hyperlocal, meaning what’s happening in Los Angeles is different than Las Vegas, San Antonio, Charlotte, Nashville, and so on. So today let’s zoom way in and see what’s happening here at home in Riverside County, since that is what really matters to you!
Let’s start with the number of new listings. This number is so painfully low right now, and this is the slowest start to the year in terms of the number of new listings that we’ve experienced in at least 15 or maybe 20 years. I have multiple clients who have been looking for the right home for 6 months now, and there is just nothing coming on the market that works for them. Now trust me, we’re not just “waiting” for the right house, I’m out there working with other agents, I’m calling homeowners, I’m sending mail to homeowners, and doing whatever I can to get these guys their dream homes. But anyways, the number of new listings was low in March, and in April it was even lower at a little over 2600 new listings. For this time of year we usually see well over 4000 homes hitting the market every month so we actually have very few people looking to sell at the moment. This is creating an inventory problem I’ll talk about in a minute.
The number of closed sales has declined just a bit from about 2500 in March to almost 2250 in April. For this time of year we would typically expect to see over 3000 sales for the month, but I just told you the number of new listings is down as well. The number of new listings declined about 11% from March to April, and the number of closings followed with a decline of almost 11% as well. It sounds silly but it makes sense: if there are no homes for sale, no homes are going to be sold!
Let’s talk about months’ supply, which is how long it would take to sell all the properties that are currently listed if no new listings came on the market. This metric is a key indicator of whether we’re in a seller’s market which is less than 3 months, a neutral market which is 3-5 months, and over 5 months is a buyer’s market. In Riverside County the months’ supply was 2.7 months in January, 2.6 months in February, 2.5 months in March, and now 2.4 months in April. This tells us a few things. 1) we’re still in a seller’s market, 2) buyer demand is still relatively strong, and will increase if mortgage interest rates decrease (but more on that in a minute), and 3) months supply is decreasing month over month, showing us that homes are being sold faster than they are being listed, and if this trend continues we could find ourselves in a seller’s market for quite a while.
Inventory is so low that buyers don’t have too many homes to choose from at the moment, and we’re starting to see multiple offers on homes again like we did in 2020 and 2021. Even though we’ve seen an increase in buyer demand lately and we are starting to see multiple offers there are far fewer buyers in the market compared to a couple years ago making it easier for buyers to secure a home today. Now for you sellers out there even though it is considered a seller’s market don’t get too confident thinking you can list your home and get it sold for the price and terms you want in the snap of a finger. I just told you there are fewer buyers out there compared to the buying frenzy of 2020 and 2021, and there are plenty of homes out there that have been listed for more than 6 months. If you are going to sell soon you must make sure your home looks better than all the other homes on the market, in photos, videos, and in person for showings. You also need to make sure your listing agent is effectively promoting your home to buyers and buyers’ agents. Lastly, you need to nail the list price. Don’t list too high thinking “if we get that number we’ll sell” because it will probably be a huge waste of your time. Work with your listing agent to understand the comparable sales in your neighborhood, and price your home appropriately. With the perfect list price and your home looking better than all the others and your listing agent promoting your home to all the right people, you sell your home quickly and for top dollar.
One metric we use to understand the current market is the median number of days on market. This was at just 10 days one year ago in April of 2022, which steadily increased to 44 days in February of 2023. Since then the median number of days on market has been dropping like a rock to just 27 days in April. When homes start selling faster and faster like this, it is just even more evidence that we have way more buyer demand out there today than homes available for sale. And when demand greatly outweighs the supply, you know what happens to prices…
If you’ve been following the real estate market, or better yet if you follow all my monthly market update videos, you know that the average sale price in Riverside County hit an all time record of $711,000 in April of 2022. At that time mortgage interest rates were in the 4’s but by the fall they had climbed to the 7% range. In that same time the average sale price dropped from $711,000 to about $608,000 in December, and I know so many people were rubbing their hands together thinking, “this is it. This is the big real estate market crash I’ve been waiting for and I’m going to get a sweet deal on my next house.” Well, that’s not happening yet. Since December mortgage interest rates have been fairly steady, I mean they haven’t really decreased anyways, but the average sale price has jumped from about $608,000 in December to $688,000 in April! This seems like the result of the active springtime market, and if you’ve been following my market update reports I was urging sellers to list their homes in April because I think the average sale price will be even higher in May and June, but we’ll have to wait and see!
One topic I know everyone is always curious about is mortgage interest rates, which were fairly steady throughout the whole month of April. I mean there were some small fluctuations throughout the month but for the most part they hovered around the 6.5% range. I know this number looks scary to some of you thinking about buying a home, especially when your friends got an interest rate in the 3’s a couple years ago, but I would really encourage you to reach out to me and I will show you many ways to help you afford to make that move. I would also encourage you to take a hard look at new homes because so many builders are offering amazing incentives like discounted mortgage interest rates, free upgrades, free solar panels, closing cost credits, and more.
Well I'm going to keep studying the market here in Riverside County and I'll continue to deliver updates for you. I suggest you keep an eye on these stats we discussed today to give you an idea of where the market may be heading, but if you don’t want to take the time to go study all this stuff, just follow me so you always see my monthly market updates. Well that wraps up my April 2023 market update, but if you have any questions or need help with anything at all give me a call, text, email or drop a comment below, and I will see you in the next video.